Pure Storage Announces Fiscal Fourth Quarter and Full Year 2023 Financial Results

Fiscal 2023 revenue growth of 26% year-over-year
Subscription services ARR of $1.1 billion, up 30% year-over-year
Introduction of FlashBlade//E: Delivering benefits of flash at better economics than disk

MOUNTAIN VIEW, Calif., March 1, 2023 /PRNewswire/ -- Today Pure Storage (NYSE: PSTG), the IT pioneer that delivers the world's most advanced data storage technology and services, announced financial results for its fiscal fourth quarter and full year 2023 ended February 5, 2023.

"Pure continued to grow faster than the market this year with the industry's most advanced, reliable, and energy-efficient products and services," said Charles Giancarlo, Chairman and CEO, Pure Storage. "Despite current macro conditions, we remain confident in our ability to execute, manage costs, and maintain a strong innovation cycle, highlighted by today's introduction of FlashBlade//E."

Fourth Quarter and Full Year Financial Highlights

• Q4 revenue $810.2 million, up 14% year-over-year
• Full-year revenue $2.8 billion, up 26% year-over-year
  
  
• Q4 subscription services revenue $265.1 million, up 23% year-over-year
• Full-year subscription services revenue $961.3 million, up 30% year-over-year
  
  
• Q4 subscription annual recurring revenue (ARR) $1.1 billion, up 30% year-over-year
• Remaining performance obligations (RPO) $1.8 billion, up 24% year-over-year
  
  
• Q4 GAAP gross margin 69.3%; non-GAAP gross margin 70.8%
• Full-year GAAP gross margin 68.9%; non-GAAP gross margin 70.7%
  
  
• Q4 GAAP operating income $64.6 million; non-GAAP operating income $158.6 million
• Full-year GAAP operating income $83.5 million; non-GAAP operating income $457.2 million
  
  
• Q4 GAAP operating margin 8.0%; non-GAAP operating margin 19.6%
• Full-year GAAP operating margin 3.0%; non-GAAP operating margin 16.6%
  
  
• Q4 operating cash flow $233.0 million; free cash flow $172.8 million
• Full-year operating cash flow $767.2 million; free cash flow $609.1 million
  
  
• Total cash, cash equivalents, and marketable securities $1.6 billion
  
  
• Returned approximately $67.5 million and $219.0 million in Q4 and FY23, respectively, to stockholders through share repurchases of 2.4 million shares and 7.8 million shares, respectively
  
  
• Authorized incremental share repurchases of up to an additional $250 million under its stock repurchase program

"Pure delivered strong Q4 financial results growing revenue 14% and achieving record operating profit and margin," said Kevan Krysler, CFO, Pure Storage. "We are confident that we will navigate the current macro backdrop, while focusing on our commitment to deliver long-term, profitable growth."

Fourth Quarter and Full Year Company Highlights

• Market-Leading Portfolio Innovation: In June 2022, Pure introduced the new FlashBlade//S family of products, built with a modular architecture that leverages a nearly unlimited scalable metadata architecture, offering more than double the density, performance, and power efficiency of previous versions. Additionally, Pure made two new offerings - Pure Fusion and Portworx Data Services - generally available in FY23. Today, Pure announced the addition of FlashBlade//E, an unstructured data repository priced under $0.20 per GB.
• Strong Subscription Services Momentum: In FY23, Pure extended its as-a-Service model across the full suite of Portworx offerings and also advanced its portfolio of Evergreen offerings to include the new fleet-level Evergreen//Flex.
• Leadership in Sustainability: Pure released the first environmental impact analysis of its portfolio, which found that Pure's products can use as little as one-fifth the power of competitive storage offerings. Pure also introduced the first-of-it's-kind Energy Efficiency SLA guarantee for Evergreen//One.
• Industry Recognition: Pure was named a leader in the Gartner Magic Quadrants for both Primary Storage and Distributed File Systems & Object Storage, marking its 9th consecutive year as a leader. Pure was also named one of Fortune's Best Workplaces in Technology.

FY24 Guidance

Q1FY24 Guidance will be provided during the conference call beginning at 2:00 pm PT today, March 1, 2023.

These statements are forward-looking and actual results may differ materially. Refer to the Forward Looking Statements section below for information on the factors that could cause our actual results to differ materially from these statements. Pure has not reconciled its guidance for non-GAAP operating margin to its most directly comparable GAAP measure because certain items that impact this measure are not within Pure's control and/or cannot be reasonably predicted. Accordingly, a reconciliation of this non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

Share Repurchase Authorization

Pure's board of directors has authorized, and its audit committee has approved, incremental share repurchases of up to an additional $250 million under its stock repurchase program. The authorization allows Pure to repurchase shares of its Class A common stock opportunistically and will be funded from available working capital. Repurchases may be made at management's discretion from time to time on the open market through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The repurchase program does not have an expiration date, does not obligate Pure to acquire any of its common stock, and may be suspended or discontinued by the company at any time without prior notice.

Conference Call Information

Pure will host a teleconference to discuss the fiscal fourth quarter and full year 2023 results at 2:00 pm PT today, March 1, 2023. A live audio broadcast of the conference call will be available at the Pure Storage Investor Relations website, investor.purestorage.com. Pure will also post its earnings presentation to this website in advance of the call and post its prepared remarks to this website within 24 hours following completion of the call.

A replay will be available following the call on the Pure Storage Investor Relations website or for two weeks at 1-866-813-9403 (or +44 204 525 0658 for international callers) with passcode 032614.

Upcoming Events

Pure is scheduled to participate at the following investor conference:

Susquehanna 12th Annual Technology Conference
Date: Friday, March 3, 2023
Time: 8:00 a.m. PT / 11:00 a.m. ET
Charles Giancarlo, Chairman and CEO and Kevan Krysler, CFO

The presentation(s) will be webcast live and archived on Pure's Investor Relations website at investor.purestorage.com.

About Pure Storage

Pure Storage (NYSE: PSTG) uncomplicates data storage, forever. Pure delivers a cloud experience that empowers every organization to get the most from their data while reducing the complexity and expense of managing the infrastructure behind it. Pure's commitment to providing true storage as-a-service gives customers the agility to meet changing data needs at speed and scale, whether they are deploying traditional workloads, modern applications, containers, or more. Pure believes it can make a significant impact in reducing data center emissions worldwide through its environmental sustainability efforts, including designing products and solutions that enable customers to reduce their carbon and energy footprint. And with the highest Net Promoter Score in the industry, Pure's ever-expanding list of customers are among the happiest in the world. For more information, visit www.purestorage.com.

Analyst Recognition
Leader in the 2022 Gartner Magic Quadrant for Primary Storage
Leader in the 2022 Gartner Magic Quadrant for Distributed File Systems & Object Storage

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Pure Storage, the Pure P Logo, Portworx, and the marks on the Pure Trademark List at www.purestorage.com/legal/productenduserinfo.html are trademarks of Pure Storage, Inc. Other names are trademarks of their respective owners. 

Forward Looking Statements

This press release contains forward-looking statements regarding our products, business and operations, including but not limited to our views relating to future period financial results, our technology and product strategy, specifically customer priorities around sustainability, our ability to adjust to current macro conditions and expand market share, our sustainability goals and benefits, the timing and magnitude of large orders, the impact of inflation, economic or supply chain disruptions, the pandemic and its lingering impacts, demand for our products and subscription services, including Evergreen//One, our expectations regarding our product and technology differentiation, including FlashBlade//E, new customer acquisition, the continued success of the Portworx technology, and other statements regarding our products, business, operations and results. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.

Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, which are available on our Investor Relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information is also set forth in our Annual Report on Form 10-K for the year ended February 6, 2022. All information provided in this release and in the attachments is as of March 1, 2023, and Pure undertakes no duty to update this information unless required by law.

Key Business Metric

Subscription ARR is a key business metric that refers to total annualized contract value of all active subscription agreements on the last day of the quarter, plus on-demand revenue for the quarter multiplied by four.

Non-GAAP Financial Measures

To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, Pure uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense, payments to former shareholders of acquired companies, payroll tax expense related to stock-based activities, amortization of debt discount and debt issuance costs related to long-term debt, amortization of intangible assets acquired from acquisitions, acquisition-related transaction and integration expenses, and costs associated with the exit of certain operations that may not be indicative of our ongoing core business operating results. Pure believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to free cash flow," included at the end of this release.

Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures

The following table presents non-GAAP gross margins by revenue source before certain items (in thousands except percentages, unaudited):

The following table presents non-GAAP gross margins by revenue source before certain items (in thousands except percentages, unaudited):

The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts and percentages, unaudited):

The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts and percentages, unaudited):

Reconciliation from net cash provided by operating activities to free cash flow (in thousands except percentages, unaudited):

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SOURCE Pure Storage